Joining a commercial bank or credit union might help a firm meet its financial obligations. Both of these banks also provide several other useful services, including savings accounts, loans, checking accounts, and accounts for businesses. The federal government also protects them. Nonetheless, credit unions are a preferable option, especially for startups and smaller enterprises.
This lends credence to the idea that credit union services may be beneficial to small enterprises. And because of these qualities, they may prove to be the best possible first choice in financial institutions. With that said, let’s look at why most businesses should enlist the services of a credit union.
Exceptional Customer Support
A common area where credit unions excel over major banks is in customer support. This stems from the cooperative nature of credit unions, where each customer has a stake in the business, as opposed to the strictly profit-driven nature of conventional banks.
At a credit union, customers receive individualized attention, which increases the likelihood that their specific monetary needs will be addressed. You’ll also discover partners that are encouraging and supportive, seeing your business’s success as contributing to the credit union’s growth.
In the same way that businesses are beneficial to the communities in which they operate, credit unions are also working toward the improvement of local communities by providing sponsorships, contributions, scholarships, and loans to small businesses, among other services.
Another perk of dealing with a local bank is the reduced probability of having a loan application rejected. There is no need for the application to be sent halfway across the country in order to be approved or rejected.
Lower interest rates on borrowing and higher returns on savings
Credit unions provide their members better rates on savings and lower rates on loans compared to traditional financial institutions. Small business owners benefit from lower borrowing costs since they may put that money to better use elsewhere, such as in critical investments like new infrastructure or machinery.
Greater savings interest rates facilitate the faster accumulation of wealth among members. Extra money for entrepreneurs to spend on employee education and recruitment is always welcome.
People gravitate toward banks because of the improved technology and simplicity offered by virtual banking solutions. They are under the impression that financial cooperatives are unable to provide the convenience of conducting business online; therefore; as a result, they are hesitant to join one.
However, the reality is that credit unions, like other types of financial institutions, also provide a full range of online and mobile banking services. These services include the ability to transfer funds, pay bills, make deposits, and view account activity, amongst other things.
There are many similarities between large commercial banks and smaller community-based credit unions; the key distinction is in the particulars. When you bank with a credit union, you are engaging in more than just a transaction; you are building a connection, which you can draw on repeatedly as your ideas and requirements change.